Debt recovery agreements are legal documents designed to help creditors recover outstanding debts from their debtors. These agreements lay out the terms and conditions under which a debtor can repay their debt, including the amount to be paid, the repayment schedule, and any penalties or fees for late payments.
If you are a creditor looking to draft a debt recovery agreement, it is essential to ensure that the agreement is legally binding, clear, and concise. Here is a sample debt recovery agreement that you can use as a starting point.
Debt Recovery Agreement between [Creditor] and [Debtor]
This agreement is made on [date] between [Creditor] (hereafter known as “Creditor”), a [state] corporation with its principal place of business at [address], and [Debtor] (hereafter known as “Debtor”), an individual with their place of residence at [address].
1. Debt Owed
The Creditor and Debtor acknowledge that the Debtor owes the Creditor a debt in the sum of [amount owed] (hereafter known as the “Debt”).
2. Repayment Plan
The Creditor and Debtor agree that the Debt will be repaid in full over the course of [length of repayment plan] months/years (hereafter known as the “Repayment Plan”), starting on [start date] and ending on [end date].
3. Repayment Schedule
The Repayment Plan will be structured as follows:
– [Insert amount] will be paid on the [insert date] of each month/year until the Debt is repaid in full.
– If the Debtor fails to make any payment on the due date, a penalty of [insert penalty amount] will be charged.
4. Security for Repayment
To secure payment of the Debt, the Debtor agrees to grant a security interest in their [assets or property]. The Debtor will execute any necessary documents to perfect the security interest.
If the Debtor fails to make any payment under the Repayment Plan or breaches any other term of this agreement, the Creditor may seek to enforce any security interest or take any other action available under law.
6. Governing Law
This agreement will be governed by and construed in accordance with the laws of the state of [state].
7. Entire Agreement
This agreement contains the entire understanding between the parties and supersedes all prior negotiations, understandings, and agreements between the parties.
This agreement may be executed in counterparts and transmitted by facsimile or electronic mail, each of which will be deemed an original for all purposes.
In conclusion, it is always recommended to seek professional legal advice when drafting a debt recovery agreement. However, this sample agreement provides a useful starting point to ensure that the agreement is legally binding and clear in its terms and conditions.